Questions Every Business Plan Should Answer
Writing a business plan is a crucial element of the entrepreneur’s journey, laying out the strategy and direction for the business, and offering an actionable plan for how to realize those aspirations. It isn’t just a formality; a business plan affects how investors and other stakeholders view the business. As such, it should be comprehensive, providing an answer to any questions about the business and its goals. But, it can be hard to know what to include. So, here are some guiding questions that any business plan should answer.
Why Does Your Business Exist?
This may sound like an existential question – and it is. Every business idea needs purpose and direction, so the nature of the business must be defined. What is the purpose of the business? What products or services will the company offer? Who are the target customers and how will the business reach them? Answers to these questions should provide a clear answer as to why the business exists.
What Is Your Business Model?
Every business model is different and defining the business model is key to its success. What products or services will it offer? How will it reach customers? What are the timelines for launching new products or services? What channels will it use for marketing? Will the business be a one-person show or will you hire staff?
What Is the Competitive Landscape?
The competitive landscape is a critical element to any successful business plan. Who are the competitors and how do they reach customers? What are their competitive advantages? How can the business differentiate itself from the competition? Collecting intelligence and understanding the competition is key to defensible strategies and ultimately success.
Who Are Your Target Customers?
Knowing the target market for a business is a fundamental part of success. It’s important to define the audience for the business in order to design product or service offerings and determine appropriate marketing strategies. Once identified, it’s important to understand the customer journey. How will customers in the target market become aware of the brand? How will they become interested in the products or services? How will they decide to purchase?
Where Will Your Business Be Based?
Location is an important consideration when developing a business plan. Depending on the type of business, the location can provide competitive advantages, offer access to resources, or make it easier to market the business. It’s also essential to consider the legal restrictions or requirements in the location, as well as any tax advantages or implications.
What Is Your Financials Plan?
Discussing finances is often the most intimidating part of writing a business plan, but it is an absolutely necessary component. This section should provide a comprehensive strategy for the companies financial goals. These goals should be measurable, achievable and relatable to the goals of the business. It should also include an understanding of both capital and operational costs, as well as the financial implications of important decisions.
How Will You Manage Operations?
The operational plan for a business should provide a map for running the business day-to-day. It should outline the roles and responsibilities of key personnel, as well as processes and procedures for essential business functions. This includes defining the internal systems and processes, as well as external resources that are the foundation of the business.
How Will You Measure Success?
Defining success is key to the success of any business. It should be based on the goals of the business and should be measurable. Writing specific success metrics is important to ensure the business is meeting its goals and remains focused on the right objectives.
What Are Your Brand Guidelines?
A strong brand goes far in differentiating a business from its competition and connecting with customers. The brand guidelines should define expectations for how the brand and its messaging should be presented across all channels, from written communications and packaging, to web design and beyond.
Writing a business plan is a must for any startup. It’s how investors and other stakeholders get to know and understand the core principles and strategies for the business. A successful business plan needs to be comprehensive and answer important questions about why the business exists, how it will succeed and how success will be measured. By following the questions outlined here, entrepreneurs can be sure to create business plans that are comprehensive and prepared for success.
